Management

I live in Arizona, in the "Valley of the Sun". This is the place where all winter we flaunt our clear blue skies, our spring training baseball, and the fact we can give our kids bikes for Christmas and they don't have to wait till April to use them. (Of course, from June to August we are all visiting family and friends in cooler climes...but I digress.)

Arizona doesn't legislate the sun. We don't participate in the daylight savings time nonsense. But most other places do which means in the summer we are at the same time as California and in the winter we are the same time as Utah.

The standard argument for daylight savings time was that it saved energy. You needed less lights, so you saved energy. It seemed obvious and everyone seemed to have bought off on it and now the nation happily believes they are doing their part in saving energy by participating in daylight savings.

But it seems that no one really looked at the data. USA Today had an article recently describing research done at the University of California in Santa Barbara that showed that daylight savings does save energy used for lighting but that it used even more energy on heating and cooling costs. So the net effect is participating in daylight savings actually uses more energy. Now this is not an article intended to start "digital fisticuffs" about daylight savings. But rather the interesting point that people and governments think they are saving energy when in fact they are expending more.

Does that happen in your business? Do you assume that your customers are happy with something you do or provide when in reality they don't like it? Remember back in the "continuous improvement" business craze of the 90s the phrase "In God we trust...all others bring data". That is still true. Get the data and know what you know.

"What you don't know might kill you" could also be "What you think you know could kill you". So the point is get some data, some fresh live real data of how your customer's feel. There are lots of ways to do that. I personally feel that Promoterz is a great way since it provides a way to continuously monitor the heartbeat of your company rather than just a twice a year "exam". But whatever you choose, do it. You will be surprised at what you learn from the ones that really know. Your competition will be doing it.

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If you are not regularly staying in touch with your customers someone else will. How do you stay in touch? Learn more

The F35 is an amazing jet. It can reach mach 1.6 and then stop in midair and hover while landing on the deck of an aircraft carrier in rough seas. You can see it in action here . For more than 50 years the Air Force has provided its pilots with "head up" displays so that the pilots can monitor key indicators they need without taking their view off the horizon. I guess when you are going mach 1.6 and dealing with an enemy it is pretty important not to take your eyes off the horizon. The Air Force is now testing new technology to replace the head up display specifically for pilots of the F35. According to a recent post on CNET, the new system uses infrared to actually let the pilot look right through the floor of the aircraft. It also displays the feedback that pilots need no matter which direction they are looking. The company that is developing the new technology calls it a "Helmet Mounted Cueing System."

So your business is moving along pretty fast, wouldn't it be nice to have a Helmet Mounted Cueing System to help you make better decisions? What information would you want on your cueing system? I don't think you'd want to clutter it up with important but not critical information. For example, I don't think I'd want to wander around with a copy of my latest balance sheet always in front of my eyes. The current cash balance in the bank, on the other hand, might be very useful. I don't know about you, but sometimes every second counts in getting a deposit to clear before payroll starts hitting! How about some indicator of how your customers are feeling? After all, everything we do as business owners is (or should be) about making customers happy so that they will buy from us again and again and tell their friends. Seems like knowing what they are thinking about our business and what they really want from our business should influence every decision we make. What else would you add to your HMBICS (Helmet Mounted Business Information Cueing System--got to have an acronym if we want to get any government funding!)

If you're not quite ready to pull on the Star Wars helmet (your customers might turn and run), you might check out our sponsor product, Promoterz. Right now--without government funding--you can keep a pulse on how your customers feel about your business. There is no head up display, but your customers' comments will go directly to your email so you will always be in touch and better able to take your business to mach 1.6!

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Find your happy customers and put a megaphone in their hand. Learn more

A recent BusinessWeek article describes India's HCL Technologies unique management ratings program. In essence, each manager is ranked in several areas by those that report to them. Lot's of companies do these "360" types of reviews, but what is different about HCL is that they publish the results on their intranet for the employees to see.

CEO Vineet Nayar was rated 3.6 out of 5 for how well he keeps projects running on schedule by 81 managers that rated him, and everybody at HCL knows it.

According to Nayar "In our day and age, it's the employee who sucks up to the boss. We are trying, as much as possible, to get the manager to suck up to the employee."

In addition they have an online complaint system where anyone can voice concern over a particular issue ranging from the air conditioning to bonuses. Each of these concerns becomes a "ticket". What is unique is that these tickets can be "cleared" only by the employees, not management.

Imagine applying that to your small business. Your company is the "manager" and your customers are the "employees". What if companies posted online for all customers to see how they are ranked. What if noted problems remained listed until the company deals with them and the customer removes them.

Employee retention rates have increased at HCL. How would you like to have your customer retention rates increased? Have you asked your customers to rate you and your business? They are the only ones that know how they feel about your business.

Reicheld discovered the customer question that seems to track with the future growth of a business "Would you recommend us to your friends and colleagues?" Our service, Promoterz, helps you ask them that question with the addition of "Please provide specific comments to help us understand the rating you have assigned". You will know how your customers feel and have actionable data you can use to improve.

Perhaps small businesses should include Nayar's words in their business plan "We will try, as much as possible, to get the company to suck up to the customer!"

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Customers who feel that you are listening to them are more likely to recommend you to a friend. How do your customers know that you are listening? Learn more

Chris Anderson's recent book, The Long Tail, has gotten a lot of press over the last few months. His main premise is that with modern technology it is now financially feasible, and even rewarding, to focus not on the center of the bell curve by offering a general product that will appeal to the largest group, but to focus on the many well-defined, micro markets that exist in the "tail" of the curve with specialized niche products. The purpose of this post is not to agree or disagree with Chris's book--others are already doing that. This post is about the original "long tail" entrepreneur: Eli Whitney and what we can learn from him.

Eli didn't want to be in the long tail of the curve, but he lived there along with all the rest of the world in the late 1700's. Everything was one-of-a-kind and custom made. Eli's dream was to go up the curve into the center of the bell by creating a system that could produce identical, interchangeable parts. Because we take that capability for granted now, it's difficult to comprehend what a significant thing it was.

One of Eli's greatest moments came in 1801 when he went to the new capital, Washington D.C., and demonstrated the power of interchangeability for several dignitaries including President-elect Thomas Jefferson. The demonstration? Eli disassembled several firing mechanisms and mixed the parts, then he had those attending choose a part from each pile and he put together a musket with the parts they picked. The fact each part was identical and not custom fit was amazing to those in attendance. Several federal and state contracts followed.

The impact that Eli's interchangeability invention, or the "American System of Production" as it came to be known, had on the course of history would be hard to overstate. It wasn't Eli's first "history-changing" invention either. He is best known for inventing the cotton gin. In the years following the revolutionary war the south had no cash crop and thus no economy. While staying at the plantation of a friend, Catherine Greene (widow of Nathanael Greene, General in the Revolutionary War), Eli met many locals who lamented the need for a machine that could remove seeds from the cotton.

By early 1793 Eli had a working model that was simply described as "wire teeth which worked thro' slats and a brush." The result: southern cotton production went from nearly nothing to 200 million pounds a year by the time Eli died in 1825.

George Santayana said, "Those who cannot remember the past are condemned to repeat it." With that in mind, here are a few learnings from the life of Eli Whitney, the entrepreneur:

Eli seemed to have a knack for staying in touch with the market and delivering what it wanted. As a fourteen year old during the revolution he talked his dad into installing a forge at the family farm. Then he made nails and knife blades (sold enough to have to hire a worker). When the war ended and English nails became available at prices he couldn't compete with Eli quickly shifted production to hat pins and walking sticks. He was only eighteen at the time. He did the same thing later in life when he shifted from the production of gins to the production of fire arms.

He understood the importance of connections. At the age of twenty-three he decided to go to Yale--not because he wanted to go into law or theology which were the main courses of study at the time, but because he wanted to "become a gentleman, accepted by other gentlemen." The connections he made at Yale served him well throughout his entrepreneurial career. It was Oliver Wolcott, a Yale alumnus and Secretary of the Treasury, that helped Eli get his first contract with the government to put his interchangeability ideas to the test making firearms.

He failed. Eli made very little off his cotton gin invention even though he secured a patent on it. He spent a lot of time in court rooms trying to enforce that patent, but in the end he had very little to show for it. At one point he wrote to a friend, "Bankruptcy & ruin were staring me in the face & disappointment trip'd me up every step I attempted to take. I was miserable...loaded with a debt of 3 or 4,000 dollars, without resources and without any business that would ever furnish me a support."

He learned and succeeded. At about that time things were heating up in Europe and the Federal government was looking to become self-sufficient in arms production. With his knack for delivering what the market needed, and his connections, Eli got a contract to supply 10,000 muskets to the government in 28 months and got an advance of $5,000 to get things started. Having learned from his cotton gin experience that patents guaranteed nothing, he determined the road to success lay in producing more, at a faster rate and better price than any competitor could. So he set out to create a factory that could produce interchangeable parts. Success wasn't immediate. It took him 8 to 10 years to produce all 10,000 muskets but in the process he invented the milling machine. in 1811 he got another order for 15,000 muskets and produced them all in 2 years.

Asking customers for feedback is a great way to get them more engaged and find opportunities to improve any business. Unfortunately, as with anything good, if not used appropriately they can cause more grief than benefit. Here are a few holes not to step in:

1) Don't ask just because you can. There is nothing worse than a long customer service survey--so long that by the time you finish it you can't remember what the original shopping experience was like. Is anyone really using that data? Make it as short as you possibly can and then cut it in half. Your customers will thank you and you'll stay focused on what is really important. Want more detail? Contact a few of those that answered your short survey and ask them if they'd be willing to spend some more time on additional questions.

2) Pay attention to the details. Nothing destroys credibility faster than a stupid question. If you limit yourself to only a few questions all the stupid ones will go away. Here is an example from the September 2006 Readers Digest:

Maybe I was overreacting, but I couldn't help worrying about the quality of care at the local hospital. On a form titled "Some Questions for Our Pregnant Patients," the very first item was: "1. Gender? (check one) M_ F_." Jenniey Tallman, Tyro, Virginia

3) Numbers are good, comments are better. Numbers, if used appropriately, can give you a good feeling for trends and direction over time, but they are no match for free-form comments from your customers. Numbers can be manipulated and misinterpreted but actual comments like the following paint a compelling picture that doesn't require interpretation.

...location has long lines all the time (out the door). They could do something to speed up the process. Sometimes we don't go there because we know it takes so long.

Don't throw the baby out with the bath water. Customer feedback is a great thing. Just be careful how you ask.

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Unhappy customers tell on average 22 other people. If you ticket price is $50 that is $1100 in revenue. How would you like to know before they tell 22 others? Learn more

We search the business blog world looking for posts that illustrate principles, or "Seeds", that if followed, or "planted", will help small businesses grow. We list them here for your convenience. Enjoy.